A chunk of the luxury Thread condominium in Union City, NJ, has just been sold after the developer defaulted on his mortgage.
Things at the much-lauded Thread Condominium, located at 3312 Hudson Avenue, appear to have unraveled after the developer failed to pay off his loan when the housing market turned south.
The 14-story building opened in November 2008 amidst a glare of publicity as celebrity marketing firm CORE launched sales of the luxury units — the first in the blue collar Union City neighborhood — at prices that ranged from $300,000 to $700,000.
Priced well-below similarly styled Manhattan apartments yet located a 10-minute bus ride through the Lincoln Tunnel from the city, the building was expected to spark a gold rush by developers priced out of Hudson River waterfront communities such as Hoboken and downtown Jersey City.
The building’s developer, Marshall Weisman, took out a $40.5 million loan in June 2007 to build what was hailed at the time as one of the chicest new apartment towers in the area that would capitalize on its prime site above the Hudson River palisades, offering spectacular views of the New York skyline and luxury amenities at cheaper prices.
The first hint of trouble came when CORE — a respected high-end marketing company led by the well regarded veteran Shaun Osher —left the project without explanation several months into the opening. Osher did not return calls seeking comment for this story.
According to records, 93 of 151 apartments had been sold by September 2010 when Weisman’s loan matured. By that time, he still owed $8.7 million and, when he failed to meet the maturity date, the lender began foreclosure proceedings.
A team from the investment sales brokerage Massey Knakal Realty Services, lead by chairman Bob Knakal with sales manager Jonathan Hageman and Elysa Berlin, was hired by the lender to market the $8.7 million note with the remaining 58 units still for sale serving as collateral.
The lender had also moved to start directly collecting rents from 41 of those apartments that were being leased.
Knakal declined to discuss specifics of the note sale or name the buyer, however, he noted that the deal offered plenty of upside. “This was an opportunity for an investor to acquire completed condo units at a bulk acquisition price,” said Knakal. “The units have a stabilized cash flow allowing the buyer to hold the units as an income-producing rental property or sell them over time.”
Current rents in the building are averaging around $2,000 a month, while sale prices achieved at the units already sold have ranged between $370,000 and $410,000, or $386 psf, well above local pricing for similarly built apartments. According to StreetEasy.com, average prices for Union City are $292 psf.
The building has its own parking garage, health club, residents lounge and children’s playroom as well as a second floor common terrace and a rooftop with a private terrace for residents of the eight top floor penthouses.
REW was unable to contact Weisman for comment on the Thread note sale. The Lakewood, NJ, resident is associated with several development companies which have enjoyed varying degrees of success throughout the tri-state area.
As W Developers, he build 50 Franklin in Tribeca, a 72-unit luxury condo that has recorded 50 sales since its Fall 2008 launch at an average of $1,076 psf, according to StreetEasy.com; an 88-unit building at 75 Clinton Street in Brooklyn Heights; and a 10-unit project at 72 Steuben Street in Clinton Hill.
Weisman is also a managing member of Vernon Realty Holding, a company that owns a massive stalled development site in Long Island City.
Last year, the Real Deal repo rted that Durst Fetner Residential was expected to sell a $32.5 million note on that one million-square-foot East River site back to Weisman.
He had taken that mortgage out in 2008, according to city records, but told the magazine at the time that he had the wherewithal to buy it back and hoped to resume work on a six-building development of nearly 1,000 apartments.
According to city documents, the site had been shut down due to dangerous conditions and remains in foreclosure. Durst declined to comment for this story, although the developer continues to hold the $32.5 million note.
Attempts by REW to reach Weisman also turned up companies that included Columbia Realty Holdings, Cantello, LLC and H&C Development.
In an interview he gave to the Lakewood Local newspaper website The Voice in 2010 Weisman — whose full name is Eliyahu Mordechai Weisman — was said to be “too shy” to agree to have his photograph published but was credited with creating an enclave of kosher homes in the wealthy town.
The website noted that since arriving in Lakewood in 1979, 35 residential developments have been developed by him, with several of their streets named after his close family members.
— ADDITIONAL REPORTING BY LAUREN N. JOHNSON